Michael DeSimone is the President and CEO of ShopKeep, the cloud-based point of sale and business management solution used by more than 23,000 small businesses. A global chief executive with over 25 years of experience working within the fintech industry, Michael knows how to grow and scale companies within high growth and rapid-change environments. As President and CEO of ShopKeep, he leads strategy to sustainably grow and scale the business, which launched in 2008.
Accelent: When you start as CEO at a new company, how do you think about your C-suite talent strategy for creating growth, and, perhaps, preparing for an exit?
Mike: First of all, I don’t immediately strategize an exit, I focus on what it’s going to take to build a valuable business. Different kinds of businesses at different stages will have different exit options. The starting orientation is really figuring out your baseline and how you’re going to build value in the business.
I personally haven’t founded anything. That skill set seems to be beyond me, and I have great admiration for founders who are people that can make something out of nothing. I seem to be the person who comes in behind the founder. Usually what I have when I arrive is a great idea and a somewhat messy organization that requires some clean up in order to scale.
From there, I really think it’s a matter of identifying the intersection of what the business needs and what you can afford. I also prioritize hiring by focusing on first hiring around what I’m not particularly good at. That’s a big piece of it.
I look for holes in the organization. Sometimes its very obvious, sometimes it’s not.
Accelent: Let’s talk about what you mean when you say “can afford…”
Mike: One of the things I would say that I’ve learned, and I’ll plant a flag here because I learned it the hard way – you’ve got to hire for where you’re going, not where you are. I didn’t do that at BorderFree a couple of times and I ended up with people, who by the time we got them on board and up to speed, the needs of the organization had moved past their skill set. I found I had shied away from hiring people with deeper experience, because I felt like they would be overkill for the job. It’s almost like when you’re aiming at something, you need to “lead” it. I used to have snowball fights as a kid, if a guy was running, you wouldn’t throw the snowball where he was, you throw the snowball where he’s going to be. So now I think about hiring for where we’ll be in 6 – 12 months if possible. I definitely had to go through some upgrade cycles that I could have avoided if I had just hired at that next level in the first place.
Accelent: That’s a fascinating point. So, what was the push and the pull that caused you to not hire for where you were going?
Mike: There are two things I would worry about: One was the cost. Generally, you’re going to pay more for somebody who has more experience in a more senior position.
The other was hiring somebody who would likely get bored in the role. That was my concern: “Oh, this person is so overqualified, they’re going to come in here and think ‘why did you hire me for this, I could do this with my eyes closed’.” I underestimated how challenging it is to do some of the jobs that I had to hire for. So for me, even if we could afford someone more senior, I made decisions to hire people who were probably more junior than I should have.
This time around I’m taking a more investment oriented approach. I pushed for a hire here that the recruiter challenged me on, “Are you sure you want to bring on another big salary like that?” We brought her on, and she’s already paid for herself twice in her first 45 days.
I’ve learned a lesson – If you know you have the need, and assuming the organization can afford it, I think you should aim as high as you possibly can, with the assumption that the organization is going to grow in underneath that person.
Accelent: That’s a profound point. Let’s talk about hiring criteria. What are the criteria that you care about when you’re hiring C-suite executives?
Mike: I’m not just looking for smart people and experienced people – so is everyone else. I’m also looking for professionally mature people who know how to collaborate, who are innovative problem-solvers. Do they like tackling a hard challenge and do they like solving for it, and do they like winning as a team?
I also value people who are very comfortable with accountability. I like people who take the work seriously, but not necessarily themselves so seriously. We have company values around innovation, fun, teamwork, accountability, and community for a reason – I’m looking for people that have modeled those values consistently across their careers.
I’m also looking for somebody who, demonstrably, can stay in their lane. Because, for whatever reason, lots of people in companies of all stages and sizes have a hard time focusing on their patch and trusting the rest of the team to do the same.
Lastly, I’m looking for people who fit the culture. Not just fit the culture as it is, but the culture I’m trying to build.
One of the things I’ve found as a CEO is that you really need to spend a lot of time paying attention to and cultivating the culture. Like I said, it’s a funny thing, and it’s something I didn’t really realize because when I became CEO at; there were eight people in the company. There really wasn’t much of a culture, so as the company grew, the culture grew up around it. When that happens you are at risk for taking a constructive culture for granted.
When I joined ShopKeep, there were already more people in the company than I had at Borderfree. At the time, the culture of the organization was clearly misaligned to what the company aspired to be. The team and I have spent a year really trying to get that alignment, and the more people you have the harder that can be to do. It has been a significant learning experience for me as I didn’t recognize how difficult it would be to make those changes. In my prior experience, the culture was established when the company was still quite small – and so it grew up around us.
Accelent: How do you change a culture?
Mike: There’s two things. One, you have to recognize the individuals and factors that are detractors from the culture you’re trying to create and take them out of the organization as quickly as you can. It seems like most tech companies have a tendency to hire the “brilliant jerk” personality. People usually describe them something like: “The guy’s a total a**-hole, but he’s a really smart engineer.”
Mike: You have to work to remove them from the organization as soon as I can.
Mike: As soon as we understand that they can’t collaborate, that they’re going to be “anti-“, no matter what you’re trying to accomplish, they need to go. I don’t care how smart they are or how long they’ve been there. If they’re a detractor from the culture you’re trying to build, they need to move on. It’s usually only a few people, but they can do a lot of a damage, chew up a bunch of time, and then they usually end up resigning anyway.
The other side of that, is when I’m hiring. In addition to trying to fill skill gaps, I’m also looking for people that will embody and demonstrate the cultural values we’re trying to promote. The combination of removing cultural detractors while adding cultural promoters is – to me –the best way to quickly re-orient the culture of an organization.
Accelent: The hiring process is such a human process. It comes down to a candidate sitting across the table from you. How do you use that conversation to assess a candidate?
Mike: Even the best hiring processes still fail about a third of the time. I’ve been around the block a few times and I admit – I do rely a lot on intuition. I know you’re not supposed to do that when you’re hiring. But I’ve found my track record is pretty good, and that I’ve usually regretted the times when I didn’t listen to my instincts in the first place. I also trust the process my team has in place to vet experience and skills, so I spend my time digging for proof points on character and values.
Second, I make sure that the people who are going to be working with this person have time to spend with them. Not 25 people, but the 3 to 5 people they’ll interact with most.
I like people to spend a fair amount of time together before we hire someone. I’m looking for their opinion on that person’s skills and experience, but I’m also looking for their cultural reaction to that person. Do they believe they can work effectively and collaboratively with this person?
Accelent: How do you handle references?
Mike: First off, I do them myself, I don’t rely on HR or the recruiter to do that for me. Second, people don’t usually provide names of references that aren’t going to be anything other than super complimentary so I try to get back channel references when I can. Lastly, I rely a lot on my favorite reference question: “What is it that you can tell me about this person that would be really helpful for me to know now, that’s going to take me six months to learn about them?” That can be a tough question, and it can take some time to get an answer but it usually gives me tremendous insights.
Accelent: Thank you.